Friday, August 27, 2004

A mixed blessing

It is now officially recognised that this August is the wettest on record in certain parts of the country. This has caused massive problems for farmers, struggling to get their harvest in.

So bad has been the weather that, weeks after the harvest should have been finished, current estimates are that only 30-35 percent of the national winter wheat crop has been gathered. Many farmers are seeing their crops begin to sprout and, with weather conditions still poor, are facing a total loss.

On a national scale, the total grain harvest may well drop about a million tons, down from an expected 16 million tons to fifteen.

But for those who have managed to bring in their crops, their problems are only just starting. The high moisture content – up to 25 percent in some cases – means facing massive drying costs or a delay of several months in selling their crops while they are allowed to dry naturally.

Furthermore, because the harvest is late, wheat in particular has been harvested after it has peaked, bringing protein values right down, and with it the prices, costing farmers £20 a ton in lost value.

In a closed market, that loss would not occur for, as shortages bite, prices go up which in some way compensate for loss of quantity. "Unfortunately", remarks Farmers Guardian, there are more than enough supplies in the rest of Europe and further afield (for the moment) and, owing to our membership of the EU, these supplies have free access to our market and serve to keep prices down.

In fact, the rest of Europe has had a bumper harvest, with the French wheat crop alone up by 9 million tons, so prices are stable and are unlikely to rise. This may be good news for the consumer but it is bad news for farmers.

Furthermore, because of the EU competition rules, national governments are not permitted to pay additional subsidies, just supposing this government was inclined to. All farmers can hope for is an advance payment on their standard CAP subsidies, normally due in December, to help ease their cash flows.

While this Blog would in no way advocate additional payments, or import protection to keep prices high, the issue here is that since the 1960s, British farmers, and especially the large arable growers, have been in favour of our membership of the Community, because of the subsidies it brought with it.

But, as they reckon up their shrinking income this year, they may also pause to reflect that, had Britain not joined the EU, the effects of the current bad harvest might not have been so devastating. Membership, after all, is proving to be a mixed blessing.

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